As autonomous electric aviation startup Pyka works hard to expand its lineup of crop dusters and cargo planes, it's also garnering interest from a new and attractive target: the Department of Defense. The promise of climate-friendly, dual-use autonomous aircraft has also enticed investors, leading to a new $40 million B round of funding.
Pyka was founded in 2019 to specialize in crop dusting, a vital yet very old-fashioned business that you may not personally see very often. The company's lightweight, compact, electric Pelican aircraft are designed to autonomously spray pesticides over large areas, relieving human pilots and remote-controlled operators of dangerous and tedious work.
While the passenger version worked for a time, the company decided that a cargo version of the Pelican would be more practical in the short term after raising capital in 2022.
“It took about 10 months from rendering to first flight. It was very exciting. It was very fast,” said co-founder and CEO Michael Norcia. At the time, their main goal was inter-island commerce, a market typically served by slow ships and older planes, which means high costs and long lead times. Small, autonomous aircraft that can quickly jump over puddles with 400 pounds of cargo every day could transform many island communities.
Image credit: Pyka
But the cargo version caught the attention of a customer that Norcia hadn't yet considered a realistic possibility: the Department of Defense.
“When we initially developed this product, our focus was purely on commercial use cases. We quickly realized there was a lot of interest and need for this product within the defense industry,” Norcia said. “It was a surprise to us.”
“We always wondered whether our class of vehicle could be used in defense logistics,” he explained. “Would it be big enough? Would it be okay if it couldn't hover? But I think the war in Ukraine has changed everyone's thinking about autonomous systems in defense, logistics and problem solving. It wasn't clear when we started, but now it feels like logistics is going to be 100% automated by default!”
As military and general government procurements move away from the eight-figure, custom-built “elaborate” systems that may exist five years from now and toward cheaper, more flexible solutions that exist today, it's not hard to imagine the utility of a fleet of cargo-carrying drones.
Pica is not a military contractor, but he is working with aerospace veteran Sierra Nevada to make the modifications needed to make such planes useful on battlefields and in conflict zones. He said the modifications are mostly electronics, not adding guns or armor plating. The military version of the plane is called the Rum Runner.
Norcia acknowledged that the decision to go into defense work was not an easy one.
“Those conversations were pretty extensive early on, and while it's not in line with what everyone at the company wants to spend their days doing, it's something I've been trying to think about deeply,” he said. “The good news is that automating logistics has some pretty positive outside effects. I'm a proponent of having robots moving things that might get shot down by other robots, whereas the status quo is that you have vehicles with people in them that get shot down by other people.”
He points out that governments and the military have a long history of subsidizing aviation research and development, which is entirely true — in fact, most people are surprised to learn that a huge amount of basic research across many disciplines is funded through Department of Defense grants.
“There's an existential element to it. Aviation is a very significant industry to be in. There are high regulatory hurdles and it's extremely risky, so neither of those things are good news for early-stage startups that are trying to make money,” Norcia said. In other words, they weren't necessarily in a position to say no. [Pelican Cargo] “Right now, aircraft deliveries and revenues are tied to defense partners, and we expect that to remain the case for probably several years to come. Over the next five to 10 years, the case for commercial use will likely become stronger, but there will still be regulatory constraints.”
Image credit: Pyka
That doesn't mean they're not working on it: their commercial efforts continue, and the new funding will help them scale up manufacturing after years of tweaking and improving the design in response to customer feedback.
Norcia said that despite ceasing passenger aircraft development, all of their work ultimately serves that market.
“We're making progress!” he said. “That's still our goal. We want to be successful in industrial applications and then leverage that data advantage and cash flow to build vehicles that carry passengers. That's the legacy we want to leave at Pyka.”
The $40 million B round was led by Obvious Ventures, with participation from Piva Capital, Prelude Ventures, Metaplanet Holdings and Y Combinator.